New US bill would punish settlement boycotters

New bill in Congress backed by AIPAC aims to thwart international measures to hold Israel accountable for settlements built on occupied Palestinian land.

(Wisam Hashlamoun/APA images)

US Senator Ben Cardin is once again trying to pass legislation designed to suppress the boycott, divestment and sanctions (BDS) movement for Palestinian rights.

During the last Congressional session, the Maryland Democrat succeeded in sneaking language into a must-pass trade bill making it a “principal negotiating objective” of the United States “to discourage politically motivated actions to boycott, divest from or sanction Israel” while negotiating trade deals.

This discouragement of BDS extended to boycotts of products originating from settlements in what the bill euphemistically referred to as “Israeli-controlled territories.” All of Israel’s settlements in the occupied West Bank and Syria’s Golan Heights are illegal under international law.

But with the Trump administration’s skepticism toward free trade deals and its withdrawal of the United States from the controversial Trans-Pacific Partnership, it seems unlikely that the United States in the near term will be leveraging anti-BDS pressure through trade negotiations as Cardin envisioned.

With BDS continuing to gain momentum, Cardin went back to the drawing board and introduced the Israel Anti-Boycott Act on 23 March, designed to coincide with the annual policy conference of the American Israel Public Affairs Committee.

According to Cardin and the other original sponsors of the Israel Anti-Boycott Act, the bill also seeks to “prevent the implementation of similar ‘blacklists’ or boycotts in the future.”

It aims to do so in a heavy-handed manner: by imposing governmental sanctions – denial of loans, fines and even potentially jail time – on companies complying with calls from the UN Human Rights Council to boycott Israeli settlement products.

Shrewdly shrouded

If it becomes law, the bill could also sweep up in its broad ambit companies refusing to do business with Israeli settlements whatever their source of inspiration for doing so may be. These sanctions would also apply to potential future international governmental calls for a broader boycott of Israel.

The draconian nature of the bill is shrewdly shrouded. None of the above-mentioned sanctions are specified in the actual text of the bill.

Only by closely examining the underlying laws which would be amended by this bill does its intent become evident: to harshly punish those companies which exercise their First Amendment-protected right to engage in boycotts of Israeli settlement products.

The bill seeks to amend two laws – the Export Administration Act of 1979 and the Export-Import Bank Act of 1945 – to accomplish its aim.

The Export Administration Act is the primary law which makes it illegal for US corporations to comply with the Arab League boycott of Israel. The Department of Commerce maintains an Office of Anti-Boycott Compliance to ensure US corporations do not participate in the Arab League boycott and to fine those that do.

The Israel Anti-Boycott Act would amend this law to encompass “restrictive trade practices or boycotts fostered or imposed by any international governmental organization against Israel or requests to impose restrictive trade practices or boycotts by any international governmental organization against Israel.”

Even if a corporation was not responding directly to a call from an international governmental organization to boycott Israel or even settlement products, it could still run afoul of this bill if its actions are perceived to “have the effect of furthering or supporting” this boycott.

The potential penalties for violating this bill are steep: a minimum $250,000 civil penalty and a maximum criminal penalty of $1 million and 20 years imprisonment, as stipulated in the International Emergency Economic Powers Act.

The bill specifies that international governmental organizations include the United Nations and European Union, a clear indication the legislation is intended to counteract the limited steps the UN Human Rights Council has taken to catalog Israeli settlement products and the EU’s labeling – but not prohibition – of those products.

Protecting settlements

The bill also amends the Export-Import Bank Act to make it possible for the bank to “deny applications for credit” to corporations whose policies and actions “are politically motivated and are intended to penalize or otherwise limit commercial relations specifically with citizens or residents of Israel, entities organized under the laws of Israel, or the Government of Israel.”

The legislation refers back to the definition of BDS enshrined in law in the last congressional session to include “Israeli-controlled territories,” thereby making the harsh sanctions applicable to actions solely targeting Israeli settlements.

The bill concludes with a dubious stipulation that nothing in it “shall be construed to alter the established policy of the United States or to establish new United States policy concerning final status issues associated with the Arab-Israeli conflict, including border delineation, that can only be resolved through direct negotiations between the parties.”

However, by establishing such stringent penalties for corporations that respond to nascent international governmental organizations’ efforts to end trade in Israeli settlement products, the bill does in fact attempt to dramatically alter US policy.

Growing consensus

For the past 50 years, official US policy has held that Israel’s settlements are violations of the Fourth Geneva Convention and illegal under international law. The bill seeks to undermine this determination by penalizing companies refusing to do business with Israeli settlements and conversely attempts to legitimize their status.

Under existing law, corporations can only be penalized for adhering to the Arab League boycott of Israel. Cardin’s bill would vastly widen this net by also ensnaring corporations that support international governmental organizations’ boycotts of Israeli settlement products or even those which are perceived as furthering those boycotts.

Last year, Human Rights Watch urged that all corporations had to end all business in or with settlements in order to comply with their human rights obligations, and that governments are responsible for taking steps to discourage settlements.

“Settlement businesses unavoidably contribute to Israeli policies that dispossess and harshly discriminate against Palestinians, while profiting from Israel’s theft of Palestinian land and other resources,” Arvind Ganesan, director of the group’s business and human rights division, said.

There is also a growing consensus among international legal scholars that trade in settlement goods violates international law.

Activists are organizing against this bill because they believe that if passed, it could stymie campaigns by the Palestine solidarity movement to pressure corporations to cut ties to Israel or even with Israeli settlements.